Chicago Overtime and Wages Lawyer
The Fair Labor Standards Act (FLSA) requires that non-exempt employees receive overtime pay equal to 1.5 x their regular hourly pay for any hours worked over 40 in a week (overtime). This can happen if employees work more than eight hours a day, or more than five days a week. An employer may require employees to work overtime hours, but the employer must give the employee overtime pay.
Many employers try to avoid paying overtime by simply paying their employees a salary, even though the employees are working more than 40 hours in a week. In such cases, the employees are still entitled to overtime pay if they are non-exempt. The overtime wages are calculated by dividing the weekly salary by 40 (or a bi-monthly salary by 80) to get the regular hourly rate and then multiplying that by 1.5 to get the overtime rate.
Overtime pay that has not been paid can still be collected up to two years from the date the pay was earned, and up to three years if the employer was consciously violating the law. In addition, where the employer’s failure to pay overtime is intentional, the employer can be required to pay an additional amount of money equal to the amount owed. This is known as liquidated damages and its intention is to punish the employer.
The FLSA’s overtime provisions do not apply to every company. Only companies whose gross receivables exceed $500,000 per year are required to pay overtime. But the $500,000 means the amount of money coming in, not the amount of profits the company received. So a small independent dry cleaners for example may make $700,000 in a year and be covered even though it has expenses of $400,000 and therefore has a profit of only $300,000. In addition, some cases have indicated that the $500,000 limit is an approximation and a company that makes a little less may still be covered. Note that, unlike discrimination laws or the Family and Medical Leave Act, the number of employees makes no difference.
Exempt v. Non-Exempt Employees
Unlike the Family and Medical Leave Act, it makes no difference how long you have worked for an employer. An employee is entitled to overtime pay in the first week that he works more than 40 hours. The key is that not all employees are covered by the law. The law differentiates between “exempt” employees – employees that are not covered by the law – and “non-exempt” employees who are covered by the law.
An employee who is paid by the hour and not by salary, is automatically non-exempt and is entitled to overtime pay for working more than 40 hours in a week. But one must actually be an employee and not an independent contractor (that is you must actually be an employee of the company and not be your own business doing work for the employer).
Generally, high paying executive, professional, or managerial jobs are exempt and therefore cannot get overtime pay. Executives are people who are officers of corporations or have a very high degree of responsibility. Professionals are usually people who have to have special educational achievements like, lawyers, architects, doctors, and teachers. Managers are usually people who supervise others. But just because a job title is has the word “manager” in it does not make it exempt. The key is what work the job does.
There are also a list of particularized exemptions which include among others: computer analysts, salespeople, and servers in restaurants. Recent changes in the Federal laws have created more exceptions, but individual states have their own laws. While this page discusses Federal overtime law which is applicable in all states, pleas see our state specific pages for a discussion of state overtime pay and overtime laws in these states: Illinois, Indiana, Iowa, Michigan, Pennsylvania, Wisconsin.
Employer Tricks and Traps
Employers often make mistakes in deciding which employees are exempt and which are not. Sometimes they even try to trick employees into thinking that they are exempt (not entitled to overtime). You may still be entitled to overtime pay even if: 1) you are on a salary; 2) you have the word manager in your title; 3) your employer says you are an independent contractor (you might not be); or 4) your employer just tells you that you are exempt. Another common trap is for employers to pay employees their regular hourly rate for hours over 40 in a week. If you make $10 per hour and in a 50 hour week you are paid only $500 ($10 x 50 hours), you are still owed an additional $50 because the last 10 hours your overtime pay was $15, not $10. You should have gotten time and a half. These calculations can be tricky and you should review them with an employment lawyer or labor lawyer.
It is also illegal for an employer to retaliate against an employee for asking for his overtime pay, for contacting an attorney, or even filing a claim. If you complain of not receiving overtime pay and your employer fires you, you have a claim for retaliation. This is a separate violation of the law and you should definitely consult an employment lawyer.
If you have not been paid overtime, or have only been paid your regular wage for overtime hours, you may be entitled to more money. The overtime and wage laws are very complex, but the Chicago overtime lawyers Maduff, & Maduff understand them and can help you. Give us a call.